7th March 2018
According to the Office for National Statistics, in the last three months of 2017, factory output rose by 2.3%, which could potentially spur on an increased public interest in investing in booming sectors including pharmaceuticals, financial services and FMCG brands.
Manufacturing businesses have seen the most significant uplift since 2008, with British manufacturing currently riding high due to two key trends; the weaker currency and overall global growth.
In the wake of the EU referendum, the weak pound has in fact allowed British manufacturers to excel, boosting up export orders and sending UK factories soaring. With manufacturers taking advantage of the political upheaval caused by Brexit, economists are now predicting that following this dramatic increase, the industry may soon see more stable progress instead of any further dramatic acceleration.
Overseas customers have seen this lul in pound value as an opportunity to acquire quality British made products at a cheaper price point. The manufacturing industry trade body, EFF, published their quarterly survey which demonstrated a record high when it came to orders, with output at a high. A historic jump up to a high of +37pc. The drive in export demand has resulted in a leap in 12 percentage points when compared to the previous period.
However, this excellent for the manufacturing industry comes at a cost to the construction sector, which, at the end of 2017, was languishing at a year-long low. Purchasing managers index (PMI) numbers are showing little to no growth in the construction sector, with commercial work declining due to the uncertainty surrounding Brexit.
With recent reports emerging stating that manufacturers operating in Britain is set to outpace the rest of the economy this year, this is largely being attributed to the global demand for UK exports. Beating the 1.5% GDP growth that was previously forecast, firms are now predicting a 2% increase this year.
As a result of the overall positive global economic state, the manufacturing industry is now planning to invest further and more heavily in expanding, through both investment and increasing and broadening their recruitment efforts.
The Uk factory boom could be good news for those looking for new investment opportunities brought about by the boom in manufacturing and online sales. The increased demand for these services and UK products from overseas has led to a subsequent increased demand in warehouse space. Those who are looking to dip their toe into supporting the e-commerce industry should look at the huge demand for space as an opportunity to expand to investing in industrial space.
Investors should also consider identifying locations that off good transport links and within easily commutable distance to a big city and easily accessible from the main motorways. Investing in the development of a warehouse should also consider the scales which they need to work to, in order to be in the running for attracting the large online retailers, like Amazon, who don’t wish to purchase or build their own warehouses. Aptly named ‘mega-sheds’ could quickly increase in value, with the potential to rapidly rise in value due to the demand, particularly in areas around London.